* Czech Jan PMI jumps 3rd month to 53.1, from 50.8 in Dec
* Hungarian PMI rises above 50 for first time since Aug 2008
* Polish PMI slips to 51.0, from 52.2 in Dec
By Michael Winfrey
PRAGUE, Feb 1 (Reuters) - Manufacturing in the two emerging
European Union economies most linked to the euro zone leapt
ahead in January after positive news from their export mainstay
Germany, but slowed in the region's largest economy Poland.
Economists were surprised by the improvement felt by Czech
and Hungarian producers and expressed guarded optimism that the
recovery in one of the world's regions hit hardest by the crisis
may be finding traction.
But they warned the improvement was still largely driven by
government stimulus in richer western European states, some of
which is already easing off, leaving risks the region's recovery
could falter in the second half of 2010.
The Czech Purchasing Managers' Index (PMI) jumped for the
third straight month to 53.1, from 50.8 in December, data
compiled by Markit Economics, showed, with acceleration in both
output and new orders.
Hungary's PMI, compiled under different methodology, climbed
to 53.5, from 49.1 in December, rising above the break-even 50
level demarcating growth from contraction for the first time
since August 2008.
"The reasons are obvious: an improvement in economic climate
in the euro zone, which can be observed in new orders and
production," said David Marek, chief economist in Prague-based
Patria Finance.
"We are a small and open economy, and just as we were
quickly pulled down by the euro zone in times of the downturn,
we are being pulled up again. The reaction of the Czech economy
is more significant than, say, in Poland."
In Poland, whose 38-million strong domestic market helped
make it the only EU state to avoid contraction during the crisis
-- it grew by 1.7 percent last year -- PMI slipped to 51.0
points in January, from 52.4 in December.
Although still above 50, the figure was hurt by deceleration
in new orders and slippage in employment, the latter of which is
expected to continue to deteriorate to a jobless figure of
around 12.8 percent at the end of the year.
Analysts noted that the reading, though below forecast and
lower than in the previous month, remained above the break-even
level for growth and showed that the Polish economy was
continuing to stabilise, albeit at a slower pace.
"It indicates that 2010 economic growth is unlikely to be
better than what we saw at the end of 2009," said Mateusz
Szczurek, chief economist at ING in Warsaw.
The Polish zloty <EURPLN=> led gains among its peers on
Monday, firming more than 1 percent to its strongest level in a
year and briefly breaking 4.00 to the euro. The Czech crown and
Hungarian forint were both up marginally higher.
GERMAN RECOVERY KEY
The Czech data was helped particularly by a rise in new
export orders, while manufacturers there also shed jobs at a
slower pace than in 2009, Markit said.
In December, the country showed its first rise in industrial
output since autumn of 2008, when the crisis crushed demand in
western Europe and caused double-digit drops in output among
eastern European producers.
The PMI jump also resembled a rise in Germany's January Ifo
business climate index, which rose more than expected to its
highest level in 18 months and eased some concerns that Germany
could falter because of a harsh winter and other factors.
Some analysts expressed surprise that the end of car
scrapping subsidies in Germany and a still-uncertain view on
foreign demand had not weighed more heavily on the Czech and
Hungarian economy in the first part of the year.
But analysts said improving demand in the euro zone, which
consumes the vast majority of Czech and Hungarian output, was
still driven by government stimulus, and the entire region would
still take several years to return to pre-crisis growth.
"For now at least, demand in western Europe seems to be
dragging the more open economies forward," said Neil Shearing,
from Capital Economics.
(Editing by Patrick Graham)
